According to the latest TEG Road Transport Price Index (TPI), the average haulage price-per-mile has dropped 3% month-on-month and 2% year-on-year – despite the cost of diesel rising 12% over the last 12 months. This comes in the face of meteoric inflation and operational cost increases during this period.
At their lowest level since March of 2021, the figures paint a clear picture. However, haulage companies seem to still be holding back their prices. That said, with the Windsor Framework possibly heralding tighter collaboration between the EU and the UK, hauliers will be hoping for better profit margins in the coming months.
Consumer Spending Focusing on Services
When looking at courier prices over this period, they’ve risen by 10% year-on-year, although they did fall by 4% in February as consumer spending focused more on services, as opposed to material goods that require courier services. Research has also illustrated a growing demand for lower/zero-emissions vehicles as the sector readies itself for the transition.
Truck manufacturers have already invested a significant sum in vehicles powered by hydrogen and electricity, with other technologies being brought to market. As such, the firms that can afford the initial cost of a ‘green’ fleet can look forward to major operational savings.
“The Future For Freight Still Looks Promising”
Speaking on the matter, the Transport Exchange Group chief executive Lyall Cresswell had an optimistic view of the haulage industry going forwards:
“A price drop in February is nothing new. We’ve seen exactly the same pattern in previous years, and we’d expect prices to rise gradually as we head into spring. However, this year is somewhat uncertain as the UK narrowly avoided a recession and inflation remains high.
Businesses are still scaling back, encouraging haulage and courier companies to keep their prices down, even as they contend with high costs, but the future for freight is still looking promising. There are huge opportunities for development in new technology and sustainability – opportunities that the industry must grab.”
Adding her own take on things, Kirsten Tisdale, Aricia Consultants’ director of logistics had this to say:
“Both elements of the TEG Road Transport Price Index continue to interest. The haulage element of the index still shows year-on-year deflation, which has been ongoing since June last year, despite significant rises in key operational costs. But the courier element carries on with inflation, which is now back into double figures.
Bearing that in mind, it’s no surprise to hear that the Bank of England might raise interest rates again later this month, as the overall TEG index comes back out of the Bank of England’s comfort zone.”
A Critical Time For the UK’s Haulage Industry
As we move towards the second quarter of 2023, the UK’s haulage industry continues to bear the pressure of a lack of drivers and rising costs. Will hauliers be forced to raise their prices in the future? That remains to be seen, but as ever, the HGVC team will continue to offer industry-leading HGVC licence acquisition programs via our national training centre network.
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